By Dayan Candappa and John Irish
MANAMA/DUBAI (Reuters) - The global credit crisis has diminished the Arab appetite for securitization, delaying development of a potential $250 billion market that would drive growth in Islamic finance, industry officials said on Monday.
From governments to ratings agencies, officials had been talking of an impending boom in securitization in the Middle East and North Africa, turbo-charged by surging real estate prices, new mortgage laws and rapidly growing populations.
The Islamic finance industry, which favors investments backed by physical assets, was poised to be the main beneficiary, and Gulf mortgage firms and banks were scrambling last year to announce sales of asset-backed bonds.
Then the market for securities backed by U.S. subprime mortgages imploded, forcing banks around the world to write down at least $80 billion in losses and borrowers to scrap plans to sell bonds.
Mortgage-backed bonds have come under especially intense scrutiny.
"We are dealing with more suspicious investors," said Ashraf Bseisu, chairman of the Bahrain Insurance Association, a grouping of 39 insurers, brokers and reinsurers.
"People are going back to the drawing board to make sure that the structure of the securitization is more palatable and more sellable," he told the Reuters Islamic Finance Summit in Manama.
DEMAND FOR HOUSING Continued...
© Thomson Reuters 2008. All rights reserved.
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
| Global Energy | Jun 01 - 5, 2008 | Energy |
